China's Xi offers another $60 billion to Africa, but says no to 'vanity' projects

BEIJING (Reuters) - Chinese President Xi Jinping offered another $60 billion in financing for Africa on Monday and wrote off some debt for poorer African nations, while warning against funds going toward “vanity projects”.

Speaking at the opening of a major summit with African leaders, Xi promised development that people on the continent could see and touch, but that would also be green and sustainable.

China has denied engaging in “debt trap” diplomacy, and Xi’s offer of more money comes after a pledge of another $60 billion at the previous summit in South Africa three years ago.

Xi, addressing leaders at Beijing’s Great Hall of the People, said the new $60 billion will include $15 billion of aid, interest-free loans and concessional loans, a credit line of $20 billion, a $10 billion special fund for China-Africa development, and a $5 billion special fund for imports from Africa.

Chinese companies will be encouraged to invest no less than $10 billion in the continent in the next three years, he said.

Government debt from China’s interest free loans due by the end of 2018 will be written off for indebted poor African countries, as well as for developing nations in the continent’s interior and small island nations, Xi said.

“China-Africa cooperation must give Chinese and African people tangible benefits and successes that can be seen, that can be felt,” he said.

China will carry out 50 projects on green development and environmental protection in Africa, focusing on fighting climate change, desertification and wildlife protection, Xi said.

Related Coverage

He pledged, without giving details, that China would set up a peace and security fund and a related forum, while continuing to provide free military assistance to the African Union.

Chinese officials have vowed to be more cautious to ensure projects are sustainable. China defends continued lending to Africa on the grounds that the continent still needs debt-funded infrastructure development.

Speaking earlier at a business forum, Xi said China had to be careful about where money was spent.

“China’s cooperation with Africa is clearly targeted at the major bottlenecks to development. Resources for our cooperation are not to be spent on any vanity projects but in places where they count the most,” he said.

Beijing has also fended off criticism it is only interested in resource extraction to feed its own booming economy, that the projects it funds have poor environmental safeguards, and that too many of the workers for them are flown in from China rather than using African labor.

‘AFRICA KNOWS BEST’

Chinese officials say this year’s summit will strengthen Africa’s role in Xi’s Belt and Road initiative to link China by sea and land with Southeast and Central Asia, the Middle East, Europe and Africa through an infrastructure network modeled on the old Silk Road.

Chinese President Xi Jinping speaks during the High-level Dialogue between Chinese and African Leaders and Business and Industry Representatives at the sixth China-Africa Entrepreneur Conference at the Beijing National Convention Center in Beijing, China September 3, 2018. Lintao Zhang/Pool via REUTERS

Xi said the plan, for which Beijing has pledged $126 billion, would help provide more resources and facilities for Africa and would expand shared markets.

China loaned around $125 billion to the continent from 2000 to 2016, data from the China-Africa Research Initiative at Washington’s Johns Hopkins University School of Advanced International Studies shows.

State media has accused the West of sour grapes over China’s prominent role in Africa and has angrily rejected claims of forcing African countries into a debt trap.

“In terms of cooperation with China, African countries know best,” widely read tabloid the Global Times wrote in an editorial on Monday.

“Western media deliberately portray Africans in misery for collaborating with China and they appear to have discovered big news by finding occasional complaints in the African media about Sino-Africa cooperation,” it said.

Every African country is represented at the business forum apart from eSwatini, self-ruled Taiwan’s last African ally that has so far rejected China’s overtures to ditch Taipei and recognize Beijing.

Sudan President Omar al-Bashir, who has been in power for nearly 30 years, is wanted by the International Criminal Court (ICC) for war crimes over killings and persecution in Sudan’s Darfur province between 2003 and 2008.

Slideshow (4 Images)

Xi told him on Sunday that “foreign forces” should not interfere in Sudan’s internal affairs, China’s Foreign Ministry said. China is not a party to the court.

“China has always had reservations about the International Criminal Court’s indictment and arrest order against Sudan’s president. We hope the ICC can prudently handle the relevant issue,” Foreign Ministry spokeswoman Hua Chunying told reporters.